HF Foods Group has entered into a definitive agreement to acquire Canadian frozen seafood importer and distributor Searay Foods for approximately CAD$47.9 million, or about US$35 million.
The transaction represents HF Foods’ first expansion outside the United States and establishes a platform for the company to pursue additional growth opportunities across North America.
HF Foods will acquire up to 100% of the outstanding equity interests in Searay Foods, Morgan Foods and Searay Foods USA. The purchase price represents approximately five times Searay’s 2025 adjusted EBITDA of about CAD$9.6 million.
The consideration will consist of cash on hand and newly issued HF Foods common stock. The companies plan to disclose the final allocation between cash and shares when the transaction closes.
The acquisition is expected to be immediately accretive to HF Foods’ adjusted EBITDA, margins and earnings per share. Completion is expected during the third quarter of 2026, subject to regulatory approvals and customary closing conditions.
Founded in 2000 and headquartered in Richmond, British Columbia, Searay imports and distributes branded ethnic and specialty frozen seafood to retail, wholesale and restaurant customers across North America.
The company sources products from more than 80 suppliers around the world and distributes them through six proprietary brands: Searay Foods, Thai Best, Pinoy’s Best, Smart Fish, Diamond Shrimp and Gold Label.
Searay has generated an approximately 15% compound annual revenue growth rate from fiscal 2019 through fiscal 2024. Its normalized EBITDA margin has ranged from approximately 14% to 15%, supported by inventory management and established supplier and customer relationships.
The acquisition gives HF Foods an initial presence in the Vancouver metropolitan area, a major North American market for Asian and other multicultural food products.
HF Foods currently distributes produce, frozen food, dry food and non-food supplies primarily to Asian restaurants and other U.S. foodservice customers. Seafood already represents approximately 36% of its net revenue, making Searay’s product portfolio complementary to its existing operations.
HF Foods expects to use its national distribution infrastructure, purchasing scale and West Coast operations to support Searay’s growth.
Searay has recently established U.S. operations and is planning direct-import activities in Los Angeles. The combined company expects these initiatives to benefit from HF Foods’ existing distribution centers, sourcing capabilities and customer relationships.
The transaction could also create cross-selling opportunities by allowing HF Foods to offer Searay’s branded seafood products to its U.S. customer base while helping Searay expand the range of products and services available to its Canadian customers.
Following the acquisition, Searay will operate as a subsidiary of HF Foods. The existing management team is expected to remain in place, led by incoming CEO Derick Ngan.
Searay founders and co-presidents Jack Chan and Philip Chan will work with HF Foods during the company’s next phase of development.
HF Foods described the transaction as an extension of its acquisition strategy, which focuses on geographic expansion, broader distribution capabilities and entry into complementary product categories.
The company reaffirmed its goal of increasing its consolidated adjusted EBITDA margin to at least 4.5% to 5% over the next three to five years.
Realizing the anticipated benefits will depend on HF Foods’ ability to integrate Searay, maintain supplier and customer relationships, expand cross-border distribution and manage foreign currency exposure.
KEY QUOTES:
“The acquisition of Searay is a pivotal milestone in HF Foods’ growth journey and the first step in our long-stated strategy to expand our platform beyond the United States.”
“Searay has built an exceptional reputation over 25 years as a leading Canadian distributor of ethnic frozen seafood, with deep supplier relationships, a trusted multi-brand portfolio, and industry-leading margins.”
“We are excited to combine Searay’s expertise in frozen seafood with HF Foods’ national distribution infrastructure to unlock meaningful cross-selling and supply chain synergies across both businesses.”
Felix Lin, President and CEO of HF Foods Group
“We are proud of what we have built at Searay over the past 25 years, and we believe HF Foods is the right partner to carry that legacy forward.”
“HF Foods’ scale, distribution network, and shared commitment to quality and customer service make this a natural combination.”
“We look forward to working alongside the HF Foods team to accelerate Searay’s growth, including our ongoing expansion into the U.S. market.”
Jack Chan and Philip Chan, Co-Presidents and Founders of Searay Foods
